Question

Show your work please

You plan to purchase a $280,000 condo using a 15-year mortgage obtained from your local credit union. The mortgage rate offered to you is three percent. You will make a down payment of 20% of the purchase price. What is the amount of interest and principal paid in the 101^st payment?

Answer 1

	Amount
Interest	$ 280.09
Principal	$1,266.81

Principal repayment	=	Principal remaining after 100th payment	-	Principal remaining after 101th payment
	=	$ 1,12,035.91	-	$ 1,10,769.10
	=	$       1,266.81
Interest expense	=	Monthly payment	-	Principal repayment
	=	$       1,546.90	-	$       1,266.81
	=	$           280.09
Working:
Loan amount	=	280000*(1-0.20)
	=	$ 2,24,000.00
Present value of annuity of 1	=	(1-(1+i)^-n)/i		Where,
	=	(1-(1+0.0025)^-180)/0.0025		i	=	3%/12	=	0.0025
	=	144.8054715		n	=	15*12	=	180
Monthly payment	=	Loan amount	/	Present value of annuity of 1
	=	$ 2,24,000.00	/	144.8054715
	=	$       1,546.90
Present value of annuity of 1	=	(1-(1+i)^-n)/i		Where,
	=	(1-(1+0.0025)^-80)/0.0025		i	=	3%/12	=	0.0025
	=	72.42595169		n			=	80
Present value of annuity of 1	=	(1-(1+i)^-n)/i		Where,
	=	(1-(1+0.0025)^-79)/0.0025		i	=	3%/12	=	0.0025
	=	71.60701657		n			=	79
Loan balance after 100th payment	=	$       1,546.90	*	72.42595169
	=	$ 1,12,035.91
Loan balance after 100th payment	=	$       1,546.90	*	71.60701657
	=	$ 1,10,769.10